From idea to opportunity

orHow to generate efficient projects

Marius GheneaBusiness Days

Tg. Mures30 September 2010

AGENDAA few ideas on the business ideasSources of ideasTrending ideasThe myth of creativityFrom idea to opportunity to businessBusiness planningPositioning of the BusinessPersonal details, Q&A

A few ideas on the IDEA

• How much is it really worth?

• Does it have to be unique?

• What happens if we tell it?

A lot of ideas are pitched every day, in all sorts of circumstances (including TV shows), but very few of those ideas ever get a material realization...

“Good ideas are a dime, a dozen”

Busting some myths on innovation

Busting some myths on innovation Innovation rarely involves lonely inventors and is always based on

legacy or reused ideas Apple didn’t invent the MP3 player, or the computer, or the phone! Most innovations come without “epiphanies”... Innovation is in many cases explained by short-term motivations The fear of ideas being stolen IS paranoia We are happy with existing good ideas, not with new ideas we don’t

understand! Innovation has to permeate society, not to stay “ahead of its time”, in

order to generate progress Being idle could help a lot! Look at Newton and at Archimedes The best idea is NOT sure to win! The future never enters the present in the shape of a finished product!

A few pointers for the ideaLook at problems/pains in the marketCheck the size of that particular marketThink of ways to alleviate the pain, ways

to solve the problem (better)Keep it simpleBe specific It’s OK to copy somebody else but...Beware of the “me, too” trap!

Sources of IdeasConsumersConsumers!Consumers!!Existing products/servicesDistribution channelsGovernmentR&D, inventions

From Idea to Opportunity: Trends

Web trendHealth trendGreen trendClean energy trendSocial trendEtc.

Trend analysis: web and greenGREEN TREND

• Starts with the assumption that many customers are willing to pay more for green products

• Numerous areas of “green” (not only green retail, but also irrigations, consulting, eco-friendly printing, recycling, green cleaning services, etc.)

• Not all with “green” written on it will be successful

• Somewhat separate trends are organic trend and clean-energy trend (but in the same ballpark)

WEB TREND• Opened by web 2.0• Low-cost entry barriers • Numerous applications

(blogging, online video, consulting, e-commerce, mobile apps, etc.)

• Not all with “web” written on it will be successful

• In fact, there’s a much higher percentage of failure in online compared to offline business

The myth of creativity

Nothing is more important for economical growth than INNOVATION

Do we need MORE, or LESS creativity in order to foster INNOVATION?

Fashion, fads: little impact on economic growth

Breakthrough innovations are rare and invented sometimes independently by many people (e.g. fountain pen or telephone)

There are structured methods to generating ideas!

Methods of Generating Ideas Focus groups Brainstorming Brainwriting Reverse Brainstorming! Problem Inventory Analysis Gordon Method Checklist Method Free Association Forced Relationships Attribute Listing Collective Notebook Method Big Dream Approach Parameter Analysis Etc.etc.

Brainstorming

1. No criticism allowed2. Wild ideas are

encouraged3. Volume of ideas is

required4. Combination and

improvements of ideas are encouraged

Check-list method1. New ways to use? Put to other uses?2. What could I copy? What else is like this? 3. Modify? Change color, form, size? 4. What to add to it? Larger, smaller? 5. Lighter, miniature? Duplicate, multiply?6. Substitute? Other material? 7. Rearrange? Change components? 8. Interchange components? Transpose

cause/effect?9. Turn it backward? Turn it upside-down?10. Combine? Blend, alloy, assort?

Want to improve a torch?

Feature Attribute Ideas

Casing Plastic Metal

Switch On/Off On/Off low beam

Battery Power Rechargeable

Bulb Glass Plastic

Weight Heavy Light

Attribute Listing

Producing Big Ideas on Demand1. Shower up your creativity! Best ideas

come when you aren’t worried about anything...

2. Sleep on it! Your answers often come when you stop thinking about them...

3. Engage in mind-mapping! Using a piece of paper and mapping the problem works...

4. Schedule day-dreaming! Unplug from push issues at the time when you’re thinking best

5. Laugh it up! Doing silly things consciously helps you get creative...

Opportunity Recognition: where does it come from?

Education

Experience: personal or work related

Networking information

Gut-feeling!

Determine the Need for an IdeaType of need: continuing/declining/emerging/futureTiming of need: duration/frequency/demand-cycleOther ways to satisfy need: without/as-is/modifiedPerceived risks/benefits: utility/appeal/taste/habitsPPR: demand-elasticity/price&market-stabilityMarket size and potential: growth/trends/threatsClient funds availability: economy/income/loansCash-outflows/inflowsComparison to other investments

Basic Principles, Time Management Principle of Desire: recognizing the need to change personal

attitudes for time allocation

Principle of Effectiveness: focus on the most important issues!

Principle of Analysis: understand the current structure of the time allocation and why/where this is inefficient

Principle of Team-Work: understanding of the fact that most of our time is taken up by others and the need to delegate

Principle of Prioritized Planning: the categorization of tasks by their degree of importance and urgency and a corresponding allocation of time

Principle of Reanalysis: periodic review of time allocation, to make sure priorities have not changed or shifted

Time Management Chart

urgencyim

porta

nce

START PLANNING ACT ON IT!

ELIMINATE DELEGATE

The business-plan is, though often criticized, probably the single most important document for the entrepreneurs at start-up stage

The Business Plan

The business-plan should be prepared by the entrepreneur!

However, he/she may consult with many other sources of information when drafting the business plan:

• accountants • marketing consultants • more experienced entrepreneurs • lawyers • etc.

The Business Plan

The Business Plan Could be useful for employees, investors, the bank,

suppliers, customers, advisors, consultants, etc. Should be viewed from three perspectives: the

entrepreneur’s, the marketing perspective and the investor perspective

Helps determine the viability of the business Provides guidance for entrepreneurs and for other

stake-holders Important tool to help obtain financing or other

types of support Self-assessment for the entrepreneur The business-planning never ends, the business-

plan should be reviewed and marked-up as often as needed!

The main three statements

P&L

More or less statements?

Cash-flow vs. profit

Cash Flow StatementsCash Flow is NOT the same as Profit!

Methods: direct or indirect

Important: Monthly projections needed!

Based on best estimates!

Getting to Break-Even

Simplified Break-Even Chart

Positioning of the businessA

bilit

y to

prov

ide

a un

ique

prod

uct/s

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Value to custmer

of product/service

Dotcom

companies

Bad

company!

Price

competition

You should

be here!

Positioning of the business

Positive Customer-centric Empowering Self-explanatory Specific Core Relevant Long-lasting Diferentiated

Positioning of the businessMake it personal! Speak plainly Apply the opposite testCascade the messageFlow with the go

(or Google search)

Profile: www.ghenea.ro

Q&A